654 F.

2d 280

Joseph DeJAMES, Appellant,

v.
MAGNIFICENCE CARRIERS, INC., Venture Shipping
(Managers
Ltd.), Nippon Yusen Kaisha, Hitachi Shipbuilding
and Engineering Company, Ltd., and Usuki Tekkosho
Hitachi Shipbuilding and Engineering Company, Ltd.,
Appellee.
No. 80-2209.

United States Court of Appeals,

Third Circuit.
Argued March 19, 1981.
Decided July 9, 1981.
Rehearing Denied July 23, 1981.

Stanley B. Gruber (argued), Camden, N. J., for appellant.

M. Jefferson Davis (argued), Reiners & Davis, Haddonfield, N. J., for
appellee; Christopher S. D'Angelo, Montgomery, McCracken, Walker &
Rhoads, Philadelphia, Pa., of counsel.
Before SEITZ, Chief Judge, and VAN DUSEN and GIBBONS, Circuit
Judges.
OPINION OF THE COURT
SEITZ, Chief Judge.

Joseph DeJames appeals from an order of the district court dismissing his
admiralty claim against Hitachi Shipbuilding and Engineering Co., Ltd.
(Hitachi) for lack of personal jurisdiction and insufficient service of process.
Although the complaint was not dismissed as to all defendants, the district court
determined that there was no just reason for delay and entered final judgment
for Hitachi pursuant to rule 54(b) of the Federal Rules of Civil Procedure. The

district court had admiralty jurisdiction pursuant to 28 U.S.C. 1333 (1976).

This court has jurisdiction under 28 U.S.C. 1291 (1976).
I.
2

DeJames, a New Jersey longshoreman, was injured while working on the M.V.
Magnificence Venture (the vessel) when it was moored to a pier in Camden,
New Jersey. DeJames filed a complaint in the United States District Court for
the District of New Jersey, alleging negligence and strict liability in tort against,
inter alia, the charterers of the vessel and Hitachi, a Japanese corporation with
its principal place of business in Japan. Hitachi had converted the vessel in
Japan from a bulk carrier to an automobile carrier. DeJames alleged that
Hitachi's conversion work was defective.

After the complaint was filed, process was served on Hitachi at its place of
business in Japan by the Japanese Minister of Foreign Affairs apparently in
accordance with the requirements of an international treaty. See Convention on
the Service Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters, 20 U.S.T. 361-367 (1969). Hitachi filed a motion to
dismiss for lack of personal jurisdiction pursuant to rule 12(b)(2) of the Federal
Rules of Civil Procedure. In support of this motion, Hitachi submitted an
affidavit from Kiyoshi Ohno, the manager of its ship repair business
department in Tokyo, Japan. According to this affidavit, Hitachi completed all
work on the vessel at its Japanese shipyard and had no further contact with the
vessel after it left Osaka, Japan. The affidavit also states that Hitachi does not
maintain an office, have an agent of any type, or transact any business in New
Jersey.

After completion of discovery, briefing, and oral argument on the question of

jurisdiction, the district court dismissed the complaint against Hitachi. The
district court held that there were insufficient contacts with the state of New
Jersey to support in personam jurisdiction. See DeJames v. Magnificence
Carriers, Inc., 491 F.Supp. 1276, 1279-81 (D.N.J.1980). The court then
considered whether it would be appropriate to aggregate all of Hitachi's
contacts with the United States for the purpose of establishing personal
jurisdiction. The district court believed that a defendant's national contacts
might be a viable basis for jurisdiction where service could be effected through
wholly federal means. See id. at 1284. However, because Congress has not
authorized nationwide service of process for admiralty actions, and because it
was necessary for DeJames to utilize New Jersey's long-arm rule, the court
concluded that the jurisdictional inquiry was limited to the question whether
Hitachi's contacts with New Jersey were sufficient to confer personal

jurisdiction. See id.

5

On appeal, DeJames makes two arguments for reversing the district court.
First, he argues that Hitachi's contacts with the state of New Jersey are
sufficient to support personal jurisdiction. Alternatively, he argues for the first
time on appeal that service was made by wholly federal means, and thus that
the district court erred in not considering Hitachi's national contacts.

II.
6

Because this suit arises under the district court's admiralty jurisdiction, the due
process clause of the fifth amendment determines whether the district court has
personal jurisdiction over Hitachi. See Fraley v. Chesapeake & Ohio Railway,
397 F.2d 1, 4 (3d Cir. 1968). However, the principle announced in diversity
cases such as International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct.
154, 90 L.Ed. 95 (1945), and its progeny is also applicable to nondiversity
cases. See Fraley, 397 F.2d at 3. This standard provides that a defendant is
subject to a forum's jurisdiction only if its contacts with the forum are such that
maintenance of the suit will not offend traditional notions of fair play and
substantial justice. It is unclear whether the Fraley court meant that the fifth
amendment requires a defendant to have minimum contacts with the forum
state, or whether the court intended only that the International Shoe test be
applied by analogy, so that a defendant need only have minimum contacts with
the United States as a whole. In any event, even in nondiversity cases, if service
of process must be made pursuant to a state long-arm statute or rule of court,
the defendant's amenability to suit in federal district court is limited by that
statute or rule. See Hartley v. Sioux City & New Orleans Barge Lines, Inc., 379
F.2d 354, 357 (3d Cir. 1967).

With these principles in mind, we will examine DeJames' arguments that the
district court erred in dismissing his claim against Hitachi for lack of personal
jurisdiction. In the district court, DeJames claimed that service had been made
pursuant to New Jersey Court Rule 4:4-4. Although he now claims alternatively
that service was made by wholly federal means, we address first his argument
that Hitachi's contacts with the state of New Jersey alone are sufficient to
support personal jurisdiction under that state's long-arm rule.

A.
8

The New Jersey long-arm rule is intended to extend as far as is constitutionally

permissible. In enacting its long-arm rule, the state of New Jersey is limited by
the due process constraints of the fourteenth amendment. Therefore, we believe

that Hitachi's amenability to suit in the District of New Jersey must be judged
by fourteenth amendment standards. We recognize that this creates an
anomalous situation because it results in a federal court in a nondiversity case
being limited by the due process restrictions imposed on the states by the
fourteenth amendment as opposed to those imposed on the federal government
by the fifth amendment. However, it would be equally anomalous to utilize a
state long-arm rule to authorize service of process on a defendant in a manner
that the state body enacting the rule could not constitutionally authorize. The
anomaly of a federal court being limited by the requirements of the fourteenth
amendment in a nondiversity case where service must be made pursuant to a
state long-arm rule could be easily rectified by congressional authorization of
nationwide service of process for admiralty cases. It is not within our province
to create such authorization.
9

DeJames directs our attention to only one contact that Hitachi has had with the
state of New Jersey: the vessel on which Hitachi had done conversion work was
docked in Camden, New Jersey when DeJames was injured.1 DeJames argues
that this contact is sufficient to support the exercise of in personam jurisdiction
over Hitachi.

10

The evolution of the due process standards that guide courts in determining
whether a defendant is amenable to suit in a particular forum has been detailed
on numerous occasions and need not be repeated at length here. The primary
consideration in the jurisdictional inquiry is that of fundamental fairness to the
defendant. The Supreme Court held in International Shoe :

11

(D)ue process requires only that in order to subject a defendant to a judgment in

personam, if he be not present within the territory of the forum, he have certain
minimum contacts with it such that the maintenance of the suit does not offend
"traditional notions of fair play and substantial justice."

12

326 U.S. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463,
61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)). In Hanson v. Denckla, 357 U.S. 235,
253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), the Supreme Court further
refined its due process analysis by stating that "it is essential in each case that
there be some act by which the defendant purposefully avails itself of the
privilege of conducting activities within the forum State, thus invoking the
benefits and protections of its laws." Recently, in Shaffer v. Heitner, 433 U.S.
186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), Kulko v. Superior Court, 436 U.S.
84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978), and World-Wide Volkswagen Corp.
v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Supreme
Court indicated that due process requires that the defendant have a reasonable

expectation that the nature of its conduct is such that it may be "haled before a
court" in the forum state. Standing alone, the fact that the defendant could
foresee that its conduct might affect the forum state, or that its product might
find its way to the forum state, is too attenuated to constitute such a "reasonable
expectation." See World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.
13

DeJames argues that the conversion work done by Hitachi on the vessel in
effect makes Hitachi the "manufacturer" of the vessel, and thus distinguishes
Hitachi from the local retailer and the regional distributor in World-Wide
Volkswagen. Because Hitachi "manufactured" a ship capable of transporting
automobiles, DeJames asserts that Hitachi should be amenable to process in any
port where the ship docks and injury occurs as a result of Hitachi's allegedly
defective work.

14

In making this argument, DeJames places substantial reliance on the numerous

cases adopting the "stream-of-commerce" theory as a basis for jurisdiction over
a foreign manufacturer. See, e. g., Stabilisierungsfonds Fur Wein v. Kaiser
Stuhl Wine Distributors Pty. Ltd., 647 F.2d 200 (D.C.Cir.1981); Duple Motor
Bodies, Ltd. v. Hollingsworth, 417 F.2d 231 (9th Cir. 1969).2 We believe this
reliance is misplaced.

15

The stream-of-commerce theory developed as a means of sustaining

jurisdiction in products liability cases in which the product had traveled through
an extensive chain of distribution before reaching the ultimate consumer. Under
this theory, a manufacturer may be held amenable to process in a forum in
which its products are sold, even if the products were sold indirectly through
importers or distributors with independent sales and marketing schemes. Courts
have found the assumption of jurisdiction in these cases to be consistent with
the due process requirements identified above: by increasing the distribution of
its products through indirect sales within the forum, a manufacturer benefits
legally from the protection provided by the laws of the forum state for its
products, as well as economically from indirect sales to forum residents.
Underlying the assumption of jurisdiction in these cases is the belief that the
fairness requirements of due process do not extend so far as to permit a
manufacturer to insulate itself from the reach of the forum state's long-arm rule
by using an intermediary or by professing ignorance of the ultimate destination
of its products. See Note, supra note 2, at 179, 189.

16

In contrast to the manufacturers in the stream-of-commerce cases, Hitachi did

not utilize the owners of the vessel it "manufactured" as distributors of its
product and thus did not take advantage of an indirect marketing scheme.
Moreover, Hitachi received no economic benefit, either direct or indirect, from

residents of New Jersey. Although it could be argued that Hitachi receives

some derivative benefit from the international market for Japanese cars and
from the fact that the charterers of the vessel were permitted to unload cars in
New Jersey, we believe that this attenuated benefit is insufficient to support the
assertion of personal jurisdiction. The only benefit that Hitachi derives from the
ability of the vessel to dock in New Jersey and the international market for
Japanese cars transported on the vessel is that Hitachi may do more conversion
of large vessels into automobile carriers, as opposed to work on smaller ships or
other kinds of ship repair. This derivative benefit is similar to the benefit that
the local retailer and the regional distributor in World-Wide Volkswagen
derived from the fact that the cars they sold could freely travel across state lines
and stop within the forum state. The ability of the consumer to drive the car
sold by the World-Wide Volkswagen defendants into the forum state, like the
ability of the charterers of the vessel to sail the ship "manufactured" by Hitachi
into the forum state, arguably increases the demand for the services performed
by the defendants. However, this derivative benefit was found insufficient to
support personal jurisdiction over the defendants in World-Wide Volkswagen,
and we likewise find it insufficient to support personal jurisdiction over Hitachi
in New Jersey.
17

We recognize that a single contact between the defendant and the forum state
may be sufficient to support the assertion of personal jurisdiction over the
defendant in a suit arising from this contact. See McGee v. International Life
Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). However, we
believe that initially we must focus on the defendant's conduct to determine
whether the nature of this conduct can be said to have put the defendant on
notice that it may be called to defend its actions in the forum state. We do not
believe that the conversion work performed by Hitachi in Japan constitutes this
kind of conduct. It is true that Hitachi could have foreseen that a ship of this
size was capable of transporting cars to any port in the world. However, the
Supreme Court put to rest the notion in World-Wide Volkswagen that this kind
of foreseeability alone is a sufficient basis for personal jurisdiction under the
due process clause. See World-Wide Volkswagen, 444 U.S. at 295-97, 100
S.Ct. at 566-67. If it were sufficient, the Supreme Court noted, "(e)very seller
of chattels would in effect appoint the chattel his agent for service of process.
His amenability would travel with the chattel." Id. at 296, 100 S.Ct. at 566. The
Supreme Court found this result unacceptable. Were we to accept DeJames'
foreseeability argument in this case, Hitachi would be amenable to suit in every
forum where a ship on which it had done conversion work, and over which it
exercised no control, could be found.

18

The conversion work done by Hitachi was performed exclusively in Japan and

had no connection with the state of New Jersey. Even accepting DeJames'
characterization of Hitachi as the "manufacturer" of the vessel, Hitachi sold its
product to the ultimate "consumer" when it returned the converted vessel to its
owners in Japan. The fortuitous circumstance that the owners chose to dock in
New Jersey is insufficient to support the assertion of jurisdiction over Hitachi
under the New Jersey long-arm rule.
B.
19

Having affirmed the conclusion of the district court that Hitachi's contact with
the state of New Jersey was insufficient to support the assertion of personal
jurisdiction over Hitachi, we now address DeJames' argument that the district
court erred in refusing to aggregate Hitachi's contacts with the United States as
a whole. On appeal, DeJames does not quarrel with the conclusion of the
district court that when Congress has not authorized nationwide service of
process, a federal district court's power to require a defendant to submit to its
jurisdiction is limited by the Federal Rules of Civil Procedure, and through
them by the long-arm rule of the state in which it sits. As we noted above, we
believe the district court was correct in reaching this conclusion. DeJames now
contends, for the first time on appeal, that process was served in accordance
with the Convention on the Service Abroad of Judicial & Extrajudicial
Documents in Civil and Commercial Matters, 20 U.S.T. 361 (1969). He argues
that the international treaty, combined with rule 4(d) (3) of the Federal Rules of
Civil Procedure, effects a "wholly federal means" of service, and that the
district court should have aggregated all of Hitachi's contacts with the United
States to support the assertion of jurisdiction.3

20

Counsel for DeJames has not presented us with a valid reason why the district
court was not apprised of the fact that service was made in compliance with this
treaty. However, the national-contacts theory was presented to the district court,
and Hitachi does not dispute that process was served in accordance with the
terms of the treaty.4 Moreover, Hitachi addresses this issue in its appellate brief
and does not appear to object to DeJames' failure to bring the treaty to the
district court's attention. Therefore, we will address DeJames' new assertion
that there was a wholly federal means available, with which he actually
complied.

21

We cannot accept DeJames' argument that rule 4(d)(3) provides the requisite
federal authority to utilize the methods of serving process contained in the
treaty. Rule 4(d)(3) allows personal service to be made "by delivering a copy of
the summons to an officer, a managing or general agent, or to any other agent
authorized by appointment or by law to receive service of process," when such

officer or agent is an inhabitant of, or can be found within, the forum state. See,
e. g., Bernardi Bros. v. Pride Manufacturing, Inc., 427 F.2d 297, 298 (3d Cir.
1970). In this case, no officer or agent of Hitachi was served in New Jersey.
Even if we accept DeJames' argument that the Japanese Minister of Foreign
Affairs was authorized by law to receive service on Hitachi, the Minister of
Foreign Affairs received the request for service on Hitachi in Japan. The only
entity within New Jersey that handled a copy of the complaint was the United
States Marshal's office in Camden, New Jersey. The Marshal's office is not
authorized to receive service on Hitachi in New Jersey. Under the terms of the
treaty, the United States Marshal's office merely transmits a request for service
to the Japanese Minister of Foreign Affairs in Japan. The Minister of Foreign
Affairs then serves a copy on the defendant in Japan. Because no service was
effected within the territorial limits of New Jersey, DeJames' reliance on rule
4(d)(3) is misplaced.
22

Having rejected DeJames' claim that rule 4(d)(3) authorizes service of process
on a foreign defendant outside the United States, we do not believe that service
on Hitachi in accordance with the treaty constitutes service by "wholly federal
means." We base this conclusion on the nature and purpose of the treaty, its
applicability to state-court litigation, and its intended interaction with the
Federal Rules of Civil Procedure.

23

The treaty was intended to further international judicial cooperation among

nations for the increasing number of cases both here and abroad that had
international overtones. Numerous problems had surfaced in connection with
international judicial assistance, primarily due to the inconsistent procedural
requirements imposed by different nations. American plaintiffs sometimes
found it difficult, or prohibitively expensive, to effect service in a manner that
complied both with the federal or state statute authorizing such service and the
requirements of the country in which the defendant was served. See, e. g.,
Jones, International Judicial Assistance: Chaos and a Program for Reform, 62
Yale L.J. 515, 534-538 (1953); Miller, International Cooperation in Litigation
Between the United States and Switzerland: Unilateral Procedural
Accommodation in a Test Tube, 49 Minn.L.Rev. 1069, 1075-1086 (1965).
Foreign plaintiffs who wished to serve American defendants in the United
States often encountered difficulties because there was no central authority to
assist them, and local officials who were authorized to effect service were often
unfamiliar with the procedural requirements of the civil-law countries. See
Note, The Effect of the Hague Convention on Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters, 2 Cornell Int'l L.J.
125 (1969). Moreover, certain civil-law countries authorized methods of service
that failed to give notice to the American defendant, thereby creating the risk

that an American defendant would suffer a default judgment in that country

without having had an opportunity to defend the claim. See, e. g., Report of the
Senate Committee on Foreign Relations on the Convention on the Service
Abroad of Judicial and Extrajudicial Documents, S.Exec.Rep. No. 6, 90th
Cong., 1st Sess. 11-12 (April 12, 1967) (Statement of Philip W. Amram)
(hereinafter cited as Senate Executive Report ).
24

In order to alleviate the problems mentioned above, the United States entered
into a multilateral treaty. This treaty provides for methods of serving judicial
and extrajudicial documents that the signatories to the treaty have agreed to
honor. It provides that each signatory shall designate a Central Authority to
process requests for service, but it also allows service to be effected without
utilizing the Central Authority as long as the nation receiving service has not
objected to the method used. Thus, the more liberal methods provided in the
Federal Rules of Civil Procedure and state long-arm rules may be used as long
as the nation receiving service has not objected to them. See, e. g., Shoei Kako
Co. v. Superior Court, 33 Cal.App.3d 808, 109 Cal.Rptr. 402 (1973); Senate
Executive Report at 13 (Statement of Philip W. Amram).

25

The purpose of the treaty is set forth at its beginning:

26

The States signatory to the present Convention,

27

Desiring to create appropriate means to ensure that judicial and extrajudicial

documents to be served abroad shall be brought to the notice of the addressee in
sufficient time,

28

Desiring to improve the organization of mutual judicial assistance for that

purpose by simplifying and expediting the procedure,

29

Have resolved to conclude a Convention to this effect and have agreed upon the
following provisions.

30

20 U.S.T. at 362 (emphasis added). We believe that the purpose and nature of
the treaty demonstrates that it does not provide independent authorization for
service of process in a foreign country. The treaty merely provides a mechanism
by which a plaintiff authorized to serve process under the laws of its country
can effect service that will give appropriate notice to the party being served and
will not be objectionable to the country in which that party is served.

31

We find further support for this conclusion in the fact that the treaty applies to

31

We find further support for this conclusion in the fact that the treaty applies to
parties desiring to make service in state-court proceedings. The nature of the
judicial system of the United States, which includes not only the federal courts
but also the many state systems with their differing procedural requirements,
was one of the primary justifications for entering into a treaty that would
provide a uniform, valid method of effecting service. In supporting the statute
that authorized the establishment of the Commission on International Rules of
Judicial Procedure, Lloyd Wright, then President of the American Bar
Association, observed:

32 49 separate procedural jurisdictions in the United States ... a unitary approach

With
is the only solution. We can hardly expect (a foreign government) to look favorably
on a program of separate negotiation with the representatives of each of the 48 states
and with the representatives of the Federal Government. The problems must be
solved through a single, unified set of discussions, the results of which will be
effective for all of the 49 jurisdictions.
33

Commission on International Rules of Judicial Procedure Establishment,

S.Rep. No. 2392, 85th Cong., 2d Sess. (1958), reprinted in 1958 U.S.Code
Cong. & Admin.News 5201, 5206.

34

By virtue of the supremacy clause, the treaty overrides state methods of serving
process abroad that are objectionable to the nation in which the process is
served. However, we do not believe that the treaty in any way affects a state's
chosen limits on the jurisdictional reach of its courts.5 If a state long-arm rule
does not authorize service outside the United States, a litigant in that state
would have no authority to invoke the methods of serving process provided in
the treaty. We believe that the treaty merely serves as an important adjunct to
state long-arm rules, and that it specifies a valid method of effecting service
only if the state long-arm rule authorizes service abroad.

35

Further, we believe that the same principle applies to the use of the treaty in
conjunction with the Federal Rules of Civil Procedure. Under rule 4, DeJames
could serve process on Hitachi in Japan under either rule 4(e) or rule 4(i).
However, service may be made under rule 4(e) only "(w)henever a statute of
the United States or an order of court thereunder" or "a statute or rule of court
of the state in which the district court is held" provides for service on a party
who is not an inhabitant of or found within the forum state. Fed.R.Civ.P. 4(e).
The alternative methods of serving process in a foreign country contained in
rule 4(i) come into play only "(w)hen the federal or state law referred to in
subdivision (e) of this rule authorizes service upon a party not an inhabitant of
or found within the forum state." Fed.R.Civ.P. 4(i). Therefore, in order for
DeJames to validly serve process on Hitachi in Japan, there must not only be a

method for effecting such service but also a state or federal statute authorizing
service abroad.
36

Apart from the Federal Rules of Civil Procedure, DeJames points to no federal
statute authorizing service of process in admiralty actions. Therefore, unless we
hold that the treaty is the equivalent of such a federal service-of-process statute,
DeJames is limited by either rule 4(e) or rule 4(i) to the authorization provided
in the New Jersey long-arm rule. As we noted in our discussion of the purpose
of the treaty, we do not believe that the treaty alone provides authorization for
service abroad. Nor do we read the treaty as the equivalent of a federal statute
authorizing service in a foreign country. Instead, we believe that the treaty is
similar to rule 4(i) in that it provides a "manner" of service to be used by a
litigant with the requisite authority to serve process. Were we to hold otherwise,
we would attribute to the Senate that ratified the treaty the intent to authorize
the equivalent of "world-wide" service of process in all federal-question,
admiralty, and diversity cases while at the same time not authorizing
nationwide service of process for those same claims. In addition, such a holding
would give the treaty a different effect when applied to federal rather than state
courts.

37

Our review of the legislative history of the treaty does not reveal such an intent.
To the contrary, the Senate Executive Report recommending ratification of the
treaty provides that the treaty "is in keeping with the spirit and purpose of the
law on this subject which is presently in effect in the United States and it will
provide increased protection (due process) for American citizens who are
involved in litigation abroad." Senate Executive Report at 3. Moreover, the
testimony before the Senate Committee on Foreign Relations supports our view
that the treaty was not intended to effect a change in the authority of courts in
the United States to obtain personal jurisdiction over a foreign defendant.
Richard D. Kearney, then Deputy Legal Adviser to the Department of State,
discussed the liberal methods of serving process under rule 4(i) and stated that
the Judicial Conference of the United States had endorsed the treaty as being in
accord with the Federal Rules of Civil Procedure. Senate Executive Report at
6-7. The testimony of each person appearing before the Senate Committee
emphasized that the treaty would not effect any substantial changes in the
operation of courts in the United States, but would provide American citizens
greater due process protection in litigation abroad.

38

In light of the legislative history, language, and purpose of the treaty, we

believe that the treaty provides an important method of serving process in
federal court litigation when a state or federal statute authorizes such service. It
does not provide authority for serving process on a foreign defendant in the

sense that the type of federal or state service-of-process statute referred to in

rule 4(e) and rule 4(i) would provide. Therefore, we conclude that service of
process on Hitachi in accordance with the terms of the treaty did not constitute
service by "wholly federal means."
39

In order for DeJames to effect valid service through the use of the treaty, he had
to rely on the New Jersey long-arm rule through rule 4(e) or rule 4(i), either of
which permits reliance on a state statute that authorizes extraterritorial service
of process. The treaty merely provides a method for effecting service to be used
by a litigant with the requisite authority to serve process. Whether the service
was effected in a manner consistent with the state long-arm rule, in accordance
with rule 4(e), or the law of Japan, in accordance with rule 4(i)(1)(A), the
authority to effect service is found in the state long-arm rule. Because we have
held that Hitachi's contact with the State of New Jersey was insufficient to
support the assertion of personal jurisdiction under the state long-arm rule, we
affirm the district court's conclusion that it had no personal jurisdiction over
Hitachi.

III.
40

The order of the district court dismissing the complaint against Hitachi will be
affirmed.
GIBBONS, Circuit Judge, dissenting:

41

I agree with the majority that the Convention on the Service Abroad of Judicial
and Extrajudicial Documents in Civil or Commercial Matters, 20 U.S.T. 361367 (1969), does not afford a "wholly federal" means of service of process on a
foreign national corporation. Like the majority, I believe the Convention, rather
than creating an independent source of adjudicatory competence, facilitates and
provides a uniform method of service of process pursuant to some already
extant state or federal statute or rule. Unlike the majority, however, I believe
Hitachi's relation to New Jersey satisfies the fourteenth amendment due process
concerns the Supreme Court enunciated in World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The majority
relies on World-Wide Volkswagen to hold that Hitachi had no "reasonable
expectation" of being haled before a court in New Jersey. The majority
analogizes Hitachi to the local dealers involved in World-Wide Volkswagen.
This analogy is off the mark.

42

In World-Wide Volkswagen the Supreme Court held that a local dealer may not

be called to account in a distant place for a product not of its manufacture sold
in a restricted market. The Court made clear that Judge Sobeloff's famous
hypothetical of the California gas station owner who sells a tire that blows out
following a cross country trip to Pennsylvania, Erlanger Mills Inc. v. Cohoes
Fibre Mills Inc., 239 F.2d 502, 507 (4th Cir. 1956), cited in World-Wide
Volkswagen, supra, at 296, would remain confined to Civil Procedure texts.
See Comment, Federalism, Due Process and Minimum Contacts: World-Wide
Volkswagen v. Woodson, 80 Colum.L.Rev. 1341, 1358-61 (1980). At the same
time, the Court reaffirmed the principle that a manufacturer who injects a
product into the stream of interstate commerce may be subject to personal
jurisdiction in the state where the product causes harm. 444 U.S. at 297, 100
S.Ct. at 567. That manufacturer may be subject to a foreign state's jurisdiction
even if his defective product arrived in the forum through the activities of a
manufacturer or distributor further down the chain of production or sale. The
Court's approving reference to the Illinois Supreme Court's celebrated decision
in Gray v. American Radiator and Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d
761 (1961), 444 U.S. at 298, 100 S.Ct. at 568; is particularly pertinent here. In
Gray, a defective valve made in Ohio was incorporated into a water heater
manufactured in Pennsylvania. The water heater exploded in Illinois. Although
Titan Valve Manufacturing Co. maintained it had no contacts with Illinois, the
Illinois court held that Titan's indirect contacts through the manufacture and
sale of valves to be incorporated in water heaters destined for interstate
markets, including Illinois, satisfied the International Shoe minimum contacts
and fairness tests.
43

Thus, World-Wide Volkswagen permits assertion of jurisdiction over one who

manufactures a finished product and sells it to another manufacturer or
distributor who will send the product into interstate commerce, even though the
first manufacturer's only direct contact with the forum state is the harm its
product caused. One who forms an integral link in the chain of interstate
manufacture or distribution is not a "local dealer." A local dealer is at the end
of the chain of production or distribution. A local dealer has no interest in the
ultimate destination of the goods once they have been purchased by the
consumer. It did not matter to the New York car distributors in World-Wide
Volkswagen or to Judge Sobeloff's California gas station owner whether, once
purchased, their products traveled out of state or around the corner. These
sellers derived no benefit from their customers' choice of where to take the
product. In contrast, Titan Valve, while not directly responsible for the
appearance of its product in Illinois, benefitted by selling its goods to American
Radiator for inclusion in products intended for interstate sale. Titan could not
reasonably claim not to expect, nor disavow the desire that its product would
end up in foreign fora.

44

Applying these principles to Hitachi, it is readily apparent that Hitachi is not a

local dealer. It is true that Hitachi converts bulk carriers to automobile carriers
in Japan, to the order of Japanese vessel owners. It is also true that Hitachi does
not control the ultimate destination of its products. But these facts do not reveal
the whole story. Hitachi's ships are an integral part of the chain of international
commerce in Japanese automobiles. Hitachi's ships carry Japanese automobiles
to American and New Jersey ports. The Port of New York-New Jersey is this
nation's largest, receiving over 185,292,125 tons of cargo per year. The New
Jersey ports of Paulsboro, Camden-Glouster, and Trenton Harbor together
account for another 28,533,725 tons per year. 1981 World Almanac and Book
of Facts at 204. It is not "merely foreseeable," but virtually inevitable that ships
Hitachi converts will dock in New Jersey.

45

Nor can it be said that Hitachi has no substantial interest in the destination of
the ships it converts. Just as Titan Valve benefitted by sale of its products to
another manufacturer who would send the valves into interstate commerce, so
Hitachi benefits by selling its vessels to shipowners who will take them to New
Jersey ports. Hitachi's ship conversion business is a vital component of the
process of distribution of Japanese automobiles in the United States. The
American market for Japanese cars enhances Hitachi's ship conversion
business. The majority suggests this derivative benefit is too attenuated, for
were there no American market for Japanese cars, Hitachi would convert
vessels to something other than automobile carriers. At 285. That argument
misses the point. The relevant question is whether Hitachi's status as an
intermediate link in the chain of Japanese car distribution benefits the business
in which Hitachi is in fact engaged.

46

The majority also suggests that there is a dispositive distinction between

Hitachi's relation to the vesselowners and a manufacturer who through a
subsequent manufacturer or distributor "takes advantage of an indirect
marketing scheme." At 285-286. It is true that the vesselowners do not market
Hitachi's ships. But both the vesselowners and Hitachi aid in the American
marketing of Japanese cars. The majority looks at the wrong market. The
relevant market is not the Japanese market for Japanese automobile carriers, but
the market for which Japanese automobile carriers are essential the American
market for Japanese cars. I perceive no valid distinction between a
manufacturer whose product serves as a link in the chain of production of
another product, and one whose product forms an essential link in the chain of
distribution of another product, at least when sale of the second product directly
promotes production and sale of the first product. Thus I would hold that
assertion of personal jurisdiction in New Jersey over Hitachi is consistent with
World-Wide Volkswagen.

47

Finally, while it is not crucial to the disposition of this case, I believe the
misconception underlying the majority's statement that the fourteenth
amendment governs amenability to suit on a federal claim, at 284-285, should
be exposed and criticized. The fourteenth amendment due process clause does
not properly apply in all its aspects to federal question claims. In International
Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the
Supreme Court established a two-pronged test to determine the constitutionality
of a state's assertion of personal jurisdiction over an out-of-state defendant. A
state's exercise of jurisdiction must comport with traditional notions of
fundamental fairness, and it must be consistent with the values of federalism
embodied in the fourteenth amendment. See Jonnet v. Dollar Savings Bank,
530 F.2d 1123, 1132, 1140 (3d Cir. 1976) (Gibbons, J., concurring). Cf. WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564,
62 L.Ed.2d 490 (1980). When a court asserts personal jurisdiction over a
foreign defendant on the basis of a state law claim, it must ensure that the
forum state does not unduly encroach on a sister state's interests. When a court,
state or federal, adjudicates a federal claim, the federalism issue is of no
relevance, for the court determines the parties' rights and liabilities under
uniform, national law. No state intrudes on another's interests. The only
relevant interest is the national one. Thus the applicable constitutional due
process provision should not be the fourteenth amendment, but the fifth
amendment.

48

The fifth amendment requires only that the forum be a fair and reasonable place
at which to compel defendant's appearance, and that he have had notice and a
reasonable opportunity to be heard. See Stabilisierungsfonds fur Wein et al. v.
Kaiserstuhl Wine Distributors Pty. Ltd. et al., 647 F.2d 200 (D.C.Cir.1981), at
272 & n.4. A defendant's national contacts enter into the fifth amendment
fairness analysis, for it would be unreasonable to subject to suit in the United
States a foreign national defendant who had but one fleeting connection with
this country. But it is not necessary, under the fifth amendment due process
clause, that that defendant's contacts relate primarily to the particular United
States location in which the claim arose. Thus, for example, it would not be
unfair under the fifth amendment to subject a foreign national shipper to suit in
New Jersey on the basis of an admiralty claim that arose in that state, even if
the offending ship was the only one ever to dock in New Jersey, and all of
defendant's other ships land in Texas. The hypothetical defendant has sufficient
contacts with the United States, and the availability of witnesses points to the
District of New Jersey as the most convenient forum for the litigation. Cf.
Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683
(1977) (central concern of jurisdictional inquiry is relationship among the
defendant, the forum, and the litigation).

49

Similarly, were a state court adjudicating a federal claim, the relevant due
process standard should remain the fifth amendment. The nature of the claim,
not the identity of the court, should determine the appropriate due process test.
New Jersey has enacted a "constitutional" long arm: its courts may assert
personal jurisdiction to the limits of the relevant due process clause. A federal
court in a federal question case referred under Federal Rule of Civil Procedure
4(e) to the New Jersey long arm thus must ask two questions: Would assertion
of personal jurisdiction violate the fifth amendment? and, Has New Jersey
placed any restriction on the constitutionally exercisable scope of jurisdiction?
The answer to the second question is no, and therefore when addressing a
federal claim, the federal court, or for that matter, a New Jersey court, need
consider only the issue of fifth amendment fairness in determining whether to
assert personal jurisdiction over the foreign defendant.

50

On the other hand, one might ask whence derives a state legislature's authority
to enact a competence statute of national application. The majority implies that
a state legislature may permit assertion of adjudicatory competence to the limits
of judicial jurisdiction under the fourteenth amendment, but it may not
implement the fifth amendment by conferring competence to the limits of the
federal due process clause. But a state long arm implements neither the
fourteenth nor the fifth amendment. A state's authority to promulgate rules of
competence derives from a state's sovereign power to adjudicate state law and
federal question cases, and indeed to rule on controversies arising under a
foreign nation's law. This power is preserved to the states through the tenth
amendment, although it may be limited by congressional provision for
exclusive federal court subject matter jurisdiction. 1 The fifth amendment
simply defines the boundaries within which a state may adopt a rule of
competence to assert personal jurisdiction in federal question cases.

51

Thus, while Rule 4(e) has the effect of converting a federal court into a state
court for purposes of determining personal jurisdiction, the rule does not
automatically make the fourteenth amendment the guiding due process
provision. The rule's real "anomaly" arises in instances where a federal court is
referred to the long arm of a state whose legislature, unlike New Jersey's, has
determined not to permit assertion of personal jurisdiction to the full extent
constitutionally permissible. In those instances, Congress' failure to enact a
general federal question competence statute has the result of bringing to bear on
federal claims, to which federalism concerns have no relevance, individual state
legislatures' decisions in effect to protect out-of-state defendants from suit on
state law claims. Cf. von Mehren & Trautman, Jurisdiction to Adjudicate: A
Suggested Analysis, 79 Harv.L.Rev. 1121, 1123-25 n.6 (referencing cases in
which general federal policies qualify statutory incorporation of state law, and

suggesting courts disregard state law provisions that are irrelevant in the federal
context).
52

Since both as a matter of fourteenth amendment due process and as a matter of

fifth amendment due process, the majority's analysis of jurisdiction to
adjudicate in this case is flawed, I dissent. I would reverse the judgment
dismissing the complaint for lack of personal jurisdiction.

In his appellate brief, DeJames refers to contacts that a subsidiary of Hitachi has
with the state of New Jersey. However, counsel for DeJames expressly
abandoned reliance on the subsidiary's contacts at oral argument before the
district court, and we will not consider them on appeal

For a more detailed discussion of the stream-of-commerce theory, and a more

extensive compilation of cases using this theory, see Currie, The Growth of the
Long Arm: Eight Years of Extended Jurisdiction in Illinois, 1963 Ill.L.F. 533;
Note, The Long-Arm Reach of the Courts After Kulko v. Superior Court, 65
Va.L.Rev. 175 (1979)

We will accept for purposes of this appeal DeJames' position that if service can
be made by wholly federal means all of Hitachi's contacts with the United
States may be aggregated to support jurisdiction in the District of New Jersey,
even if these contacts are limited exclusively to Hawaii, to Alaska, or to a few
states on the west coast. As we noted earlier, the Fraley court stated that the
fourteenth amendment standards of due process announced in International
Shoe and its progeny also apply to cases grounded on a federal claim, which is
governed by fifth amendment standards. See 397 F.2d at 3. Even if this
statement is not read to limit the jurisdictional inquiry to contacts with the
forum state, we are not sure that some geographic limit short of the entire
United States might not be incorporated into the "fairness" component of the
fifth amendment. For a discussion of possible fifth amendment limitations, see
Oxford First Corp. v. PNC Liquidating Corp., 372 F.Supp. 191, 198-204
(E.D.Pa.1974)

In addition, even if the state procedures were utilized, the limitations that
accompany service under a state long-arm rule do not apply if a wholly federal
means of effecting service of process is available. See Hartley v. Sioux City &
New Orleans Barge Lines, Inc., 379 F.2d 354, 356 (3d Cir. 1967)

Cf. Senate Executive Report at 9 (Statement of Joe C. Barrett) ("this

convention does not invade the domain of State law in the United States")

In the case of admiralty claims, federal court jurisdiction is exclusive over the
subject matter, but state laws concerning competence to assert personal
jurisdiction still obtain, since rather than preempting them with an applicable
federal competence statute, Congress through rule 4(e) has referred back to
state rules of adjudicatory competence. Compare 15 U.S.C. 77v (Securities
Exchange Act of 1933); 15 U.S.C. 78aa (Securities Exchange Act of 1934)